Our Oil Future may not be as Bleak as it Seems

The wide-ranging Al Fin hit upon a graph that will stun the peak oil believers. You’ll want to save this. The flip side is it comes from the International Energy Agency (IEA) – a point that many will use to cast justifiable suspicion. Yet absolute accuracy isn’t needed, the blocks paint a picture of a ratio that even if wrong by 50%, there is a huge amount of petroleum supply yet to be used.

Future Oil Sources from the IEA.

Comparing the yellow block of production to date with the sum of the others is a shock to many doomers – er, peak oil believers. Actually another whole block is missing, the secondary and tertiary recovery from the produced block. Factually, the development of secondary and tertiary recovery and the application is a function of wells operated by the free world majors and not much by the national oil companies. Over time the MENA, Other Conventional Oil, Deepwater and Ultra Deepwater, and Artic blocks will have secondary and tertiary recovery, too. And recovery technology is going to get better.

The price “problem” is based in the driver being supply demand. Most of the list is more costly than drilling and pumping out oil. The “drill, baby drill” call may sound a bit simplistic, but for keeping supply up to demand it remains the only fast answer and will remain so for decades.

For the alternative, new product, biofuel, environmental, and global warming perspectives high oil prices make their future goals real. The barrier for them is the research and development costs plus the incentive to invest in viable economic scale. The whole of the non-petroleum fuel business need look no further than American corn farmers and Brazilian sugar cane farmers for the only existing example of success.

There is also, as Mr. Fin points out, “New sources for transport fuels are likely to come from many directions, including new gas-to-liquids (GTL) technologies. Oxford Catalyst’s microchannel GTL technology is very much in demand, as are other new varieties of GTL technologies. The market for GTL fuels may be more than 20 million barrels per day! Imagine the impact of that huge new supply on the global oil market. (Note that approximately between 5 and 10 million barrels per day could be produced via GTL from currently flared gas alone. Stranded gas could double that number.) More information at this PDF white paper download from Velocys, creator of the Oxford Catalysts microchannel technology.

But short term, something the persons running for U.S. president might keep in mind, is that getting our neighbors in Canada piped up to the U.S. market and getting rid of Venezuela’s Chavez should be one of the economic priorities. Follow that with oil shale research to drive that price down and the future doesn’t look bleak at all.

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Pretty funny article.Completely misses the whole point of 'Peak Oil'.It is not about reserves, it is about ERoEI or NET energy. To characterize people who understand Peak Oil as 'doomers' is naive and trite. Grow up, son.

Anonymous on July 22 2011 said:

I am shocked :-* , no -- really shocked! :eek: that any writer would refer to peak oil patriarchs and leading lights as "doomers."ERoEI should be ensconced inside the peak oil shrines of all true believers, disciples, and acolytes of the one true religion. :-| No more joking around, guys! :sad:

Anonymous on July 22 2011 said:

What I don't see in any of these figures are:1) Energy return over time2) Price over timePeak oil isn't about absolute quantity of hydrocarbons. I don't think anyone disputes the fact that there are trillions of barrels still in the ground. The question is:1) How much is useably energy positive, well-to-tank?2) How much is economically feasible to extract?Extra credit follow-up question:Are governments and corporations more likely to get cheap financing if they:1) Overstate reserve quantities?2) Understating reserve quantities?Cheers everyone, and good luck!

Anonymous on July 22 2011 said:

Gee another one who confuse barrels in the ground with barrels on the markets. Hey man nice talking but show me your barrels now! As noticed by the price run up, we need it right now. There is so many thing wrong with this article that it should be ignored. Btw as a Canadian it is more about "piping up" Eastern Canadian provinces that we need, more then "piping up" the US.

Anonymous on July 23 2011 said:

When the American's president Obama shut down the Gulf of Mexico to oil exploration and drilling, that was political peak oil. When the Obama administration stalls on pipelines expediting the transfer of Canadian oil sands to US refineries, that is political peak oil. Political peak oil is very real. Political peak energy is also real, as when Obama's NRC stalls on approval of licenses to new nuclear reactors and drags its feet on all new designs.Politics is a big problem. Peak debt, peak demographic decline, and peak idiocracy are other real peak problems here. :cry: Try not to get stuck on the small peaks when the big peaks are killing you. The easy oil today was very hard yesterday. Tomorrow is another day. Human innovation is the scarce resource here.

Anonymous on July 23 2011 said:

Peak oil is here(in Canada) want it or not Alfonso. 2 barrels of water for one barrel of oil (that's only for extraction,I'm not mentioning the ecological repercussion) that's what peak oil is all about but I guess that's what you call the easy oil today.In most Petro states a gallon of oil is cheaper than a gallon of water and we are waisting 2 for 1 here if this is not peak oil tell me how you name it? Let me guess , The holy market. Countries who used to be our oil cow now consume as much as we do or even more( some countries like Saudi Arabia have more than 65% of their electricity coming from oil). We can also talk about the blatant falsification of reserve by OPEC countries to trick their own quotas. One last thing , oil can be used for many things way more useful than burning it.

Anonymous on July 25 2011 said:

I was in a book store in the US a few days ago, and asked about energy economics books. What I wanted to be told I was told: Ferdinand E. Banks (Fred) is the only dude writing those books. Well, for those who DONT intend to buy my new book (ENERGY AND ECONOMIC THEORY), let me tell them that they don't need to be concerned about peak oil. Peak oil is here and gone, as the oil prices (WTI and Brent) make clear. Unfortunately I forgot to clarify this simple point in my new energy economics book, because anybody who needs a clarification wouldn't understand it.

Anonymous on July 25 2011 said:

Sorry, Chales Monroe, i, armageddon51, and Synicalbastard, but the concept of peak oil IS all about reserves compared to amount pumped. The peak oil theory starts with the obvious fact that any particular well or field has a point of peak production and is downhill past that point. The distribution of production from all wells, past and future, added together, must logically also have a peak point, after which production diminishes. The huge amount of known reserves compared to the amount pumped thus far says that the peak point is way way way off into the future. And this is only based on known reserves; it is unlikely in the extreme that no more reserves will be found.

Anonymous on July 25 2011 said:

The author did not "confuse barrels in the ground with barrels on the markets". Peak oil, again, is a claimed lack of barrels in the ground. Yes, we need barrels in the markets as opposed to those in the ground. Which simply means we have lots and lots of oil, but something (governments) stands in the way of it being extracted.

Anonymous on July 25 2011 said:

As for the need for 2 gallons of water for each gallon on Canadian oil produced, sorry, but water, unlike oil, is clearly a renewable resource. And even if you remove bitumen block from the above, the conclusion is the same.

Anonymous on July 25 2011 said:

Oh, and ALL of the listed reserves are "energy positive" (require less energy to remove than is produces). All all extractable with CURRENT technology. Otherwise, the aren't countable as "reserves".

Anonymous on July 25 2011 said:

What clap-trap. Oil is produced by the earth on a continual basis. That's why these long-dormant fields re-fill & return to production - or the oil migrates to another large reservoir. Oil is NOT from multi-million-year-old vegetation as the "experts" blather on about. Just another Big Lie spoon-fed to the ignorant masses.

Anonymous on July 25 2011 said:

Are you really suggesting that you want to run say the US economy on oil derived from Heavy Oil and Oil shales etc. The amount of energy required to process this stuff into usable gasoline is simply enormous. Add to that the amount of water you need as well and you end up with a polluted industrial landscape where you simply don't want to be....Yes ok, there is a new oi production platform on its way into the North Sea right now to pump heavy oil from the sea bed; it needs a 50mw power plant to get this oil to move... at a time when we are trying to drive down our carbon footprint...

Anonymous on July 25 2011 said:

Excellent article. Mind you I don't believe a word of it. We are running out of oil if we like it or not.

Anonymous on July 26 2011 said:

Here in Sweden the people who decide what is to be taught, are ignoramuses. But it is not as bad as it seems because the Swedish students are not bad.I suspect that the situation is worse in some other countries, but some of the above comments are hopeless. I'm really surprised at you Alfonso. Yes, you are correct when you use the expression "political peak", but the US peak is a peak regardless of what you call it, assuming that profit maximization is still the goal of US producers. As for certain other countries, the expression should be 'geopolitical peak'.As for the observation of Local Hero, what is he trying to say? Whatever it is though it is on a higher level than the thoughts of this article's author. The bottom line is this: the average oil price (Brent-WTI) is almost 120 dollars. Another 25 and a global macro meltdown (a-la 2008) is possible - or maybe I should say likely. In these circumstances, a peak of any kind is irrelevant.

Anonymous on July 27 2011 said:

I completely agree with Charles Munroe. Most of the easy oil is gone. We will never run out of oil, it will just become more expensive.

Anonymous on July 27 2011 said:

There may or there may not be lots more oil in the ground, or under the sea. And the technological means of extraction may be now or may become available in 10-20 years time.What peak oil is about is not quantity of oil present, but quantity of oil that can be extraqcted at or below a certain market price. If oil is only extractable above that price, then economies will fail. So the oil will remain in the bground. So 'peak oil' is about the peaking of CHEAP OIL availability. And as Fred says that peak has come and gone. It is sometimes said that the oil companies were very happy that the oil shock of '74 took place, because they couldn't have sustained oil production/investment at the previous cheap oil price indefinitely.

Anonymous on July 27 2011 said:

Iran will shortly be in charge of the cheapest oil ij the world. Iraqi reserves second only to Saudi. These are new reserves. Saudi oil is vanishing, or about to. Russian oil will become expensive to transport over 2-3000 km pipelines, so she must have a 'captive market' in Europe and China. Eurpean and Chinese investment might make Russian oil/gas more economical to import.But Iran will most likely replace Saudi as Big Oil in a generation. Which is why everyone is looking for accomodation with her now...

Anonymous on July 29 2011 said:

So where is all this wonderful fuel now? Why are we paying so much? Why is the so much unrest in the oil-rich Middle East and North Africa? I can't fill my tank on empty promises.

Anonymous on July 31 2011 said:

simplistic article and how arrogant. "remove Chavez" huh? Chavez was elected democratically in free elections by the people of Venezuela.And by the way Venezuela under Chavez is the only supplier of free heating oil to low income households in America. Where are Exxon and Chevron?I'd say get rid of Exxon and Chevron rather than Chavez.